The major objectives of this grant have been to identify the signals used by oligodendrocytes and Schwann cells to form a myelin sheet around axons in the nerve. We have taken a new approach to this question by studying the Neuropathy Target Esterase (NTE) or swisscheese gene. Mutations in swisscheese, the Drosophila homolog gene of NTE, indicated swisscheese is involved in the regulation of axon-glial cell interaction during glial wrapping. We have found that loss of NTE function in mice leads to prominent neuronal pathology in the hippocampus and thalamus and also defects in the cerebellum. Absence of NTE resulted in prominent vacuolation of nerve cell bodies, abnormal reticular aggregates and defects in glial wrapping. However, the mechanism of action of NTE/swisscheese in brain function and axon-glial cellular interactions remains unknown, While our past approaches have centered upon cell cycle and tyrosine kinase regulatory events during oligodendrocyte differentiation and myelination, the proposed studies in this grant renewal promise to lead to the mechanisms involved in proper axon-glial cell interactions and neurodegeneration. This investigation will have a direct impact upon basic mechanisms affecting CNS regeneration as well as demyelinating diseases, such as multiple sclerosis. The studies are also relevant to other neurodegenerative diseases characterized by vacuolation and neuronal loss.